Group Sustainability Management Policy

1. The Shinsei Bank Group's Approach to Sustainability Management

ⅰ. View on Sustainability

The Shinsei Bank Group (“the Group”) defines sustainability as the sustainability not only of the Group and its employees, as well as the Group's customers, but also of society, ecosystems, the earth, and space as a whole for the future.

ⅱ. View on Sustainability Management

The Group places sustainability at the core of the Groupís management and conducts all corporate activities with sustainability as the sole criterion of value and judgement.
We believe that the sustainable growth of the Group's corporate value can be achieved only by solving customers' sustainability issues through business activities and ultimately by transforming our society into a sustainable society.
We define our sustainability management as a management where above-mentioned principles are indivisible from each other, and the Group is focused on actively promoting the sustainability management.

ⅲ. Background

The thought behind promoting the Group's sustainability management is based on our recognition that the sustainability of the environment and society, which has been predicated on all corporate activities, is on the brink of crisis. With the emergence of the risk that the environment and society will not be sustainable, there is a need to prepare for new risks. At the same time, new businesses are being created amid growing expectations that business innovations to transform to a sustainable way. In the light of this background, we believe that future risks and opportunities will be presented only in the context of sustainability, and the Group will continue to promote and upgrade sustainability management.
This idea is consistent with the philosophy advocated by the Principles for Responsible Banking (PRB) of the United Nations Environment Programme and Finance Initiative (UNEP FI), that is, financial intermediaries are responsible to do their utmost for the sustainable prosperity of society and people, and to expand and create positive impacts as well as to reduce and avoid negative impacts on society today and in the future through the business activities of financial institutions.

ⅳ. Key Objective of the Group

In light of this belief, the Group's key objective is to work ahead of resolving environmental, social, and other sustainability issues while fully leveraging its own financial capabilities through value co-creation with stakeholders and the creation of innovation. In particular, we believe that the present or future existence of customers who are not satisfied by conventional financial services is a social issue, and we aim to proactively fulfill the Groupís social responsibilities and roles in solving this problem. In addition to the Group, we will support customersí activities to transition in a direction that is consistent with the sustainability, as well as provide opportunities and options for customers to contribute to enhancing sustainability in the world.

2. Positioning of the Policy

The Group Sustainability Management Policy is based on the Group's Charter of Corporate Behavior and the Group's Code of Conduct. It is stipulated as the Group's basic philosophy on the sustainability management and is positioned as a basic policy on environmental and social sustainability, aiming for promoting and upgrading sustainability management while continuously engaging with stakeholders.

3. Corporate Governance to lead Environmental and Social Sustainability

ⅰ. Basic Approach

With sustainability at the core of the Group's management, the Group recognizes the enhancement of corporate governance, which leads environmental and social sustainability as one of the most important management issues in promoting and upgrading sustainability management and, accordingly the Group has established a corporate governance system. We have also established an internal control system to ensure that corporate governance functions properly.
In addition, as a listed company, Shinsei Bank will work to further strengthen corporate governance by establishing policies on initiatives related to the Corporate Governance Code.

4. Environmental and Social Sustainability Initiatives

ⅰ. Basic Approach

Environmental and social sustainability is an important and urgent issue that can affect the stability of the Group, our customers, and the financial system. Accordingly, in promoting sustainability management, we have set the policy for the environmental and social sustainability initiatives for the Group as well as the policy for initiatives to support the environmental and social sustainability for our customers.

ⅱ. Environmental and Social Sustainability Initiatives for the Group

Environmental and social sustainability is an important and urgent issue that can affect the stability of the Group, our customers, and the financial system. Accordingly, in promoting sustainability management, we have set the policy for the environmental and social sustainability initiatives for the Group as well as the policy for initiatives to support the environmental and social sustainability for our customers.

a) Respect for Human Rights

Respect for human rights is a global code of conduct that is expected of all companies and is a fundamental responsibility requirement for conducting corporate activities. Based on this recognition, the Group has established the Group Human Rights Policy to support international human rights norms and to articulate that it respects the human rights of all people including employees.

b) Initiatives for Human Capital

The Group regards human resources as the source of sustainable growth in the corporate value. Accordingly, to engage in human capital is our vital strategy in the sustainability management. The Group considers the following initiatives to be particularly important part of the initiatives for human capital and will continue to actively develop them. Through these initiatives, we aim to achieve a virtuous cycle of self-fulfillment of each employee, its impact on the society, and related sustainable improvement in the corporate value.

1) Health and Productivity Management and Well-being

The Group promotes Health and Productivity Management and the Well-being of individual employees recognizing that the safety of employeesí lives, ensuring mental and physical health, living standards, stability of economic conditions, job satisfaction, and motivation for self-fulfillment are the foundations that lead to the sustainability of human resources.

2) Diversity and Inclusion

Based on Health and Productivity Management and Well-being, the Group will continue to strengthen and leverage its organizational capabilities. Specifically, to focus on the diversity of the organization, we will further enhance our workplace environment that positively captures dynamics of various attributes such as gender, age and nationality, and differences in background, strengths and characteristics, as well as collaboration with external human resources based on new forms of employment. In addition, as an intrapersonal diversity, we will promote the creation of multi-career through flexible working styles and diverse career paths. The Group aims for incremental value creation by maximizing uniqueness and strengths of each and every employee and co-existing organically by understanding and including diversity while going through conflicts and integration. We also actively support the initiatives of diversity and inclusion, which promotes transformation into a better society.

c) Initiatives for Global Environment

Climate change-related risks arising from global warming caused by greenhouse gas emissions, and the destruction of the natural environment surrounding biodiversity pose risks to the sustainability of society including us. In the areas of energy use, procurement of goods, and disposal, the Group will promote initiatives that are friendly to the global environment including climate change and biodiversity. With regard to climate change, we will identify the impact of climate change on the Group and upgrade its sustainability management by utilizing the framework of the Task Force on Climate-related Financial Disclosures (TCFD).

d) Promotion of Corporate Philanthropic Initiatives

The Group regards philanthropy related initiatives as social contribution activities as these activities have a positive impact on the creation of a sustainable society in which employees of the Group can participate with sympathy. As a corporate group that provides financial services to society, it is important to be aware that the sound development of society is the foundation of the Groupís existence and to fulfill its role as a good corporate citizen that contributes to the development of a sustainable society. The Group has formulated the Policy for Promotion of Corporate Philanthropic Initiatives and will continue to actively promote the initiatives while working together to create value in collaboration with its supporters and partners.

ⅲ. Initiatives for addressing Customers' Sustainability Issues through Business Activities

a) Expansion and Creation of Positive Impact through Solutions to Sustainability Issues

The Group aims to directly resolve sustainability issues including the needs of customers that are not satisfied by conventional financial services. At the same time, the Group actively supports customers' business activities that contribute to resolving such sustainability issues through our financial functions. Through the Group's financial products and services, we also provide opportunities and options for customers to contribute to resolving environmental and social sustainability issues.

b) Reduction and Avoidance of Negative Impact through Responsible Investment and Lending, etc.

With regard to the Groupís investment and lending, the Group considers investment and lending to customers and businesses that do not appropriately respond to environmental impacts such as climate and ecosystems, as well as social impacts such as human rights, health and safety, etc. as management risks. Based on the establishment of the Responsible Investment and Lending Policy, the Group emphasizes responsible investment and lending for the environment and society. With regard to climate change, we review these risks and impacts on investment and lending to customers and businesses based on the TCFD framework and the Group Human Rights Policy with respect to human rights. The Group aims to reduce and avoid negative impacts while thinking together with customers.

5. Stakeholder Engagement

ⅰ. Basic Approach

In order to realize the sustainable management of the Group, it is essential to co-create value with stakeholders such as customers, partners including suppliers and subcontractors in corporate activities, employees, local communities, governments, shareholders and investors, and other for-profit and non-profit organizations. Through engaging with the stakeholders, we will constantly review the Group's sustainability management and promote value-added initiatives for stakeholders.

ⅱ. Disclosure of Information

As a part of its efforts to promote sustainability management, the Group has been striving to actively disclose information through various disclosure materials and its website. In the communication with market participants including investors, analysts and shareholders, we will continue to promote engagement while ensuring fair disclosure as stipulated in the IR/SR Policy.

6. Management Framework for Sustainability Management

ⅰ. Establishment, Revision and Abolishment of this Policy

The Board of Directors has the authority to establish, revise and abolish this policy, which is the basic policy for sustainability management.

ⅱ. Reporting, Discussion and Supervision

The Group Sustainability Committee coordinates, discusses, or makes resolutions as necessary on matters related to sustainability management. Topics based on discussions by the Group Sustainability Committee are deliberated and resolved by the Group Executive Committee and reported to the Board of Directors. The Board of Directors receives reports on the discussions and deliberations by the Group Sustainability Committee and the Group Executive Committee, and discusses and supervises important strategies, objectives, and progress related to sustainability management. Through this management framework, the Group will continue to promote and upgrade sustainability management.

ⅲ. Periodical Review

The Group periodically reviews this policy in order to continuously promote and upgrade the Groupís sustainability management.

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